Patna, Sept. 5: Several state government agencies have faltered on paying service tax on time with Bihar Industrial Area Development Authority (Biada) scoring the highest at Rs 144 crore.
“The whole concept of service tax is based on self-assessment and self-payment — based on trust and honesty of the assessee. Intentionally avoiding service tax invites interest and penal provisions, which is three times of the unpaid service tax liability. Had it been deposited before April 1, 2011 the applicable rate of interest would have been 13 per cent against 18 per cent at present,” said additional commissioner Mihir Ranjan.
“It is the fear of manipulated records and transfer of basic financial irregularities to third party intelligence wing, which is prohibiting the government agencies to follow the service tax provisions. The demand has been raised with Biada and is likely to be confirmed by them. It is a legal process and recovery action will be taken as per service tax rulings. Under Section 73 of the Indian Financial Act, 1994, the state service tax headquarters has issued showcause notice for unpaid service tax liabilities recovery,” added Ranjan.
Besides, with an interest amount of Rs 63 crore the total liability of Biada is Rs 207 crore.
Biada managing director Deepak Kumar Singh refused to comment on the issue.
Biada, formed to help and support entrepreneurs to set up industries and provide assistance and incentives under the state industrial policy, collected Rs 1306.32 crore till last fiscal year for leasing and renting of immovable properties from 2007-08 to 2010-11, but it failed to follow the June 1, 2007, notification that reads: “Service tax has been imposed on renting, leasing or similar arrangements of immovable property for use in the course or furtherance of business or commerce.”
“Our only source of information is balance sheet of the service-delivering departments or agencies concerned. It is the balance sheet through which the nature of income is identified and service tax liability is decided which follows the query from departments concerned through letters. When the headquarters is satisfied and tax liability is detected then the showcause notice was issued,” added Ranjan.